Furnished rentals: should we be worried about the draft bill for the Social Security Financing Act (PLFSS)?

The Social Security Financing Act 2017 plans to classify the short-term rental of furnished properties, which are aimed at a tourist clientele and generate revenues in excess of 23,000 euros, as a professional activity to be part of the French social security scheme for independand traders and freelancers (RSI).

The stated aim of wanting to change legislation in response to societal changes, and to prevent the rise of unfair competition, is clearly a worthy one. However, as it stands, the legal text that was enacted by the National Assembly doesn’t draw any distinction between landlords who rent their furnished properties via a platform and those who commission real estate professionals to manage them. As illustrated by the French National Real Estate Federation (FNAIM) in its recent press release (Assujettir les particuliers louant en meublé aux cotisations sociales : une mesure de justice), in order for the draft bill to effectively meet its objective, as intended by the Government, it would need to be explicitly stated that landlords whose properties are profesionally managed will not be subject to the French social security scheme (RSI).
In fact, when landlords commission real estate professionals to manage their furnished properties, the management work is already subject to social security contributions. It would be inconsistent and unfair, therefore, to force these landlords to join the social security scheme (RSI).

As things currently stand, such a mesure could have an extremely negative impact on the short-term rental business, particularly in mountain and seaside resorts, and there is valid reason to fear the rise of a phenomenon called « cold beds and closed shutters », but also that this measure might discourage landlords from delcaring their incomes.